Between 20% and 50% of pre-retirees do not know that their monthly benefits might be lowered if they continue to work after claiming Social Security.
Even for those who are aware their benefits may be reduced, most do not know that reduction is temporary. Just 30% to 40% of beneficiaries know those reductions will eventually be added back to their benefits at their full retirement age.
If a beneficiary is under full retirement age and continues to work, they may have their benefits reduced by $1 for every $2 they earn over a certain threshold.
If it sounds confusing, it is. It’s called the Retirement Earnings Test. It’s a formula used to determine if and how much your benefits will be reduced if you work after receiving Social Security benefits.
The Social Security Advisory Board offers more information for those deciding to work while receiving benefits.
To read more about this issue and how it could affect you, click here.
February 27, 2024
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